10-QPeriod: Q1 FY2023

CROWN CASTLE INC. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 3, 2023For Securities:CCI

Summary

Crown Castle Inc. (CCI) reported solid performance for the first quarter of 2023, demonstrating resilience and continued growth in its core communications infrastructure business. Net revenues increased by 3% year-over-year to $1.77 billion, primarily driven by a 3% rise in site rental revenues to $1.62 billion. The Fiber segment showed particularly strong growth, with site rental revenues up 8%, boosted by $48 million in payments related to Sprint cancellations. Operating income remained robust, though slightly down year-over-year due to increased operating expenses and interest costs. The company maintained a strong focus on returning capital to shareholders, with dividend payments totaling $686 million in the quarter, and reiterated its outlook for continued growth and shareholder returns.

Financial Highlights

50 data points
Beta

Revenue

$1.77B

94.1% Gross Margin

Net Income

$418.00M

23.6% Net Margin

EPS (Diluted)

$0.97

Total Assets

$39.05B

Cash & Equivalents

$187.00M

Free Cash Flow

$606.00M

Financial Statements
Beta
Revenue$1.77B
Cost of Revenue$104.00M
Gross Profit$1.67B
SG&A Expenses$195.00M
Operating Expenses$1.15B
Operating Income$628.00M
Interest Expense$202.00M
Net Income$418.00M
EPS (Basic)$0.97
EPS (Diluted)$0.97
Shares Outstanding (Basic)433.00M
Shares Outstanding (Diluted)434.00M

Key Highlights

  • 1Net revenues increased by 3% to $1.77 billion in Q1 2023 compared to Q1 2022.
  • 2Site rental revenues grew 3% to $1.62 billion, driven by a strong 8% increase in the Fiber segment's site rental revenues, partly due to Sprint cancellation payments.
  • 3The company generated $606 million in cash flow from operating activities, an increase of 9% year-over-year.
  • 4Discretionary capital expenditures totaled $341 million, with a significant portion allocated to the Fiber segment's small cell deployments and infrastructure improvements.
  • 5Total debt and other long-term obligations stood at $22.3 billion, with 91% of debt having fixed rates as of March 31, 2023.
  • 6The company declared and paid a quarterly common stock dividend of $1.565 per share, totaling $686 million.
  • 7Crown Castle reiterated its expectation for full-year 2023 site rental revenues growth, driven by tenant additions and continued demand for communications infrastructure.

Frequently Asked Questions

Revenue growth was primarily driven by an increase in site rental revenues, which rose by 3% to $1.62 billion. The Fiber segment saw a significant 8% increase in site rental revenues, partly due to $48 million in payments received related to the Sprint network consolidation.

Crown Castle has a significant portion of its debt at fixed rates (91% as of March 31, 2023). The company also has floating rate debt, and a hypothetical 0.25% increase in market interest rates would increase interest expense by approximately $5 million over a 12-month period. They maintain a target leverage ratio of approximately five times Adjusted EBITDA.

Crown Castle's strategy includes returning a meaningful portion of its cash generated by operating activities to common stockholders in the form of dividends. In Q1 2023, the company paid a common stock dividend of $1.565 per share, totaling $686 million. They expect cumulative common stock dividends over the next 12 months to be at least $6.26 per share, approximately $2.7 billion.

Capital expenditures totaled $341 million in Q1 2023. Discretionary capital expenditures are focused on the construction of new communications infrastructure and improvements to existing assets to support additional tenants. A significant portion is allocated to the Fiber segment, with increased spending expected for small cell deployments.